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Inside the marketing power of the iGeneration

The iGeneration: There’s a Market for That –and It’s a Big, Influential One, Too

Armed With Cash, Bevy of Tech Devices and Unmatched Marketing Savvy, the Mighty Under-18 Group Holds Strong Influence With Peers, in Household-Buying Decisions.

They are intelligent and empowered consumers with tech knowledge and marketing savvy unlike any other generation. They’ve got plenty of discretionary income, but their real power is the influence they hold with peers and in household-buying decisions.

And none of them can legally vote.

The iGeneration, also called Generation Z, is a young but mighty group of consumers under the age of 18. Their personal disposable income, aka allowance, is higher than generations before, ranging from $10 to $39 a week, according to Fuse Marketing. However, the bigger point for marketers is this group’s influence. By the time they reach college, they have accumulated 300 or more friends on Facebook and they hold significant sway with the purseholders, otherwise known as their parents.

“There’s a real resurgence of connectivity between kids and parents. We see more influence, more discussions on spending and more discussions about purchases including big investments like cars,” said Ara Finlayson, Fuse’s director of agency insights.

And while Toyota used just that sentiment in a 2010-2011 TV campaign for its Highlander model — remember the curly blond little boy who helped his parents get cool by getting them to buy the SUV instead of a minivan? — one of the iGeneration’s key categories of influences is technology. After all, as Ms. Finlayson pointed out, “This generation is not just comfortable with technology; they’re uncomfortable without technology.”

Top iGen Brands

Consider the 2011 top brands among 6- to-12-year-olds as measured annually by market research and consulting firm Smarty Pants. While McDonald’s, Oreo and Disney rank high, the top brand was the Nintendo Wii (Nintendo DS was No. 6); the iPod touch was No. 7 and iPod was No. 10. Both the iPhone and the iPad had huge jumps in popularity from 2010 to 2011, to No. 29 for the iPhone (up from No. 96) and to No. 25 for the iPad (up from No. 109, and the biggest increase in the survey) earning them the true title of iGeneration.

“Apple is changing the way [the iGen] consumes content, connects with each other and connects with their parents,” said Wynne Tyree, co-founder and chief at Smarty Pants. “Apps are the way children are consuming content. There really is “an app for that’ from math facts to comparison shopping to calling their mom on FaceTime. The app world is changing the way that kids get content.”

TV networks such as Disney, Nickelodeon and Cartoon Network, in fact, all dropped year over year in the Smarty Pants survey, and no longer hold the same portal and all-access brand for kids. Instead the devices themselves have become the portals, Ms. Tyree said.

And they certainly own plenty of them. More than 75% of teens own cellphones, according to Pew Internet & American Life Project research, with the overwhelming majority (69%) on family plans paid for by their parents. They also own iPods (76%); hand-held gaming devices (66%); and laptop computers (29%), according to the Kaiser Family Foundation’s media study of 8-to-18-year-olds.

Of course, just because they own a lot of devices doesn’t mean they use them like the rest of us, or even their closest generation, Generation Y, aka the millennials. Take texting, for instance. We all know college students love to text, but check out teens. Teens ages 13 to 17 sent an average of 3,364 messages per month in the first quarter of 2011. That’s more than double the 1,640 that 18- to 24-year-olds sent, according to Nielsen Co. data.

“Most teenagers and many tweens are now equipped with mobile phones, with smartphones gaining popularity as they become more affordable. Gen Zers use these devices largely for texting, listening to music, playing games, and taking photos and videos,” reported a recent global study of Generation Z by Euromonitor International.

They also use the phones for watching videos, consuming seven hours and 13 minutes of mobile video content vs. the average person’s four hours and 20 minutes. So it should be no surprise that they watch less TV than all other age groups — about 24 hours of TV a month, vs. the average American’s almost 35 hours every month, according to Nielsen.

For marketers, that means finding new ways to reach them. It’s probably no surprise that one of the best ways is through social media. But it’s not just about putting up a Facebook page and garnering “likes.” The iGeneration understands marketing and advertising. While they’re generally OK with marketing messages, they prefer their friends’ stamps of approval. Around 78% of teens trust recommendations from their peers, according to Fuse, and 77% rely on their friends to tell them about new products and brands, vs. 59% who look to TV advertising.

“Influence with and over each other is extremely important, and while that’s not terribly different than it was before, it’s much more widespread because of social media. So many of them now find out about bands, brands of jeans, or new snack foods from each other on social media,” said Ms. Finlayson.

That influence is then turned on their parents. While the iGeneration’s parents, Gen X, weren’t born into technology, they did come of age with it, and are therefore more comfortable with it. As a result, Gen X, the original MTV generation, and the iGeneration, the resurgent MTV generation, often share tastes in music, fashion and especially technology, witnessed by the importance of iPads and iPhones with youngsters.

“Few kids own iPhones and even fewer own iPads, but there is a lot of “passback’ usage, as in passing it back in the car to play while traveling or allowing play on an iPhone when stuck in traffic. … Brands that are doing well are the ones that do well with families, ones that can co-entertain kids and parents. Families today are just happy to connect with each other whether that’s Chuck E. Cheese, on an iPad or over a great Oreos commercial,” Ms. Tyree said.

Behold — Now We Present: the iGen

The generation coming in behind the millennials is nearing adulthood. If we take 1995 as the end of the millennials — and opinions vary wildly here — they’re already 50 million-strong. The oldest will start turning 16 in just 10 weeks. The youngest are already shaping their parents’ spending patterns. How many 4-year-olds have iPads before — or as an excuse for — their parents?

So meet the iGen. Ad Age is credited with coining the term Generation Y in an August 1993 editorial, according to no less an authority than Wikipedia. In retrospect, the name didn’t age well and seemed to presume that the generation was an iteration of the Gen Xers we called “cynical, purple-haired blobs watching TV.” As the oldest turn 30, we tend to call them millennials now.

Ad Age isn’t the first to plant this flag; the Wikipedia page for iGen exists already. But we’ve looked at a lot of choices and think this one is the best fit, so henceforth iGen it is. Perhaps we should just say we’re doing it in honor of the late Steve Jobs, who will have done a lot to shape this group even if he’s no longer around to see the full impact.

The “i” can stand for many things. Interactive, naturally: These kids were born after the rise of the internet. They’re not just accustomed to it, like the millennials, they know no world without it. They’re immersed in more media than any generation before them. They’re international — those being born today are already a majority-minority population, according to some of the leading demographers.

The “i” can also grow with them. It could stand for their self-reliance (all about “I”) or their independence — a counter-punch against their helicoptered predecessors. Perhaps they’ll be iconoclasts or idealists. Maybe they’ll all just seem like idiots. It could stand for, well, something we haven’t thought to apply to them yet. But however you want to fill in the variable, they’re here.